Management Styles

Critical Thinking Exercise: INTERNET AUCTIONS: BYPASSING THE RETAILER
Background:The traditional method for consumers to purchase goods is through a retail outlet. Even electronic retailing involves an intermediary, the online retail store. But small sellers are now finding a new chain of distribution—direct to consumers through online auction sites such as eBay and Amazon.com. Go to the website for eBay (www.eBay.com (Links to an external site.)).[i] Search the site for fax machines offered for sale. (Sometimes the Web address for a location changes. You might need to search to find the exact location mentioned.)_______________________________________________________________________________________________________________Assignment Instructions:1) Open two listings for fax machines:the least expensive offered and the most expensive.Choose items that have approximately 24 hours before expiration.2) Write down the description and current price bid. Why do you think sellers of the lower-priced item are asking such a low price?
3) Check the eBay site after 8 to 24 hours. How have the bids changed?
4) What type of payment is accepted for each of these items?How do these payment types differ from payment options at brick-and-mortar stores?Why?5) What type of business would be able to use an online auction site effectively to sell its products?eBay also offers an option for businesses to establish non auction “eBay stores” to sell products through the website. What would be the advantages to a small business of establishing such a store rather than a brick-and-mortar store? Would there be any disadvantages? Explain._______________________________________________________________________________________________________________
Purpose:To become familiar with the advantages and disadvantages of small sellers using online auction sites instead of brick-and-mortar stores.
Please refer to Learning Objective [LO] 15.5 in the text. This explains the various kinds of non store retailing. This may be helpful too you.

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